Since World War II, the Fed has not initiated rate increases in the absence of above-average GDP growth or inflation.

But just as the contraction in first-quarter 2014 gross domestic product (and 2015, prospectively) and the anemic March jobs numbers failed to be harbingers of another recession, the so-called "strong" May jobs report has little predictive value.

Moreover, as a percentage of total jobs -- the only way to look at it -- new jobs added in May make the month the 404th strongest out of the 905 reports since 1940.

Put another way, if the U.S. economy created an average of 280,000 new jobs (May's number) every month going forward, the economy would not hit "full employment" of around 5.3% until the 37th month, June 2018.

"Full employment" is defined by Federal Reserve and policy experts as the unemployment rate at which inflation starts rising more than desired, with estimates falling in the 5%-to-6% range.

Historical data show that unemployment of 5.3% or less is generally necessary for sustained wage growth (see chart 1). The official unemployment rate sits at 5.5%, and chatter about wage growth is indeed on the rise.

First, the labor force participation rate remains at historic lows, even adjusted for baby-boomer retirement. After accounting for this reality, the real unemployment rate remains at 9.9% (see chart 2).

Second, household income remains at levels last seen in 1995, and in real terms, is up 0.4% through May vs. 2014. In fairness, when food and energy are included in the consumer price index (the Fed excludes them in its analysis), actual deflation has been observed so far in 2015, adding more than 2% to the year-over-year comparison.

Signs of wage recovery? Seriously? The real growth in 2013 and 2014 was 0.3%. The U.S. economy remains about 7.5 million jobs shy of full employment.

Chart 1: Real Income and Unemployment Rate History

Demographic trends, high and rising sovereign debt levels and the absence of a capital-friendly U.S. tax and regulatory landscape conducive to growth spending in the private sector over the past 14 years, particularly the last six, have been key factors behind significantly below-trend GDP growth over that period.

But what if the U.S. economy simply reached a level of productivity -- the result of outsourcing and technology-driven capital substitution for labor -- at which today's record-low ratio of employee headcount per unit of output is the new normal?